India Withdraws Transshipment Privileges Granted to Bangladesh
In a major policy shift, the Government of India has officially revoked the transshipment facility previously granted to Bangladesh. This move, initiated by the Ministry of Finance under the Central Board of Indirect Taxes and Customs (CBIC), was announced through a circular issued on April 8. As per the new directive, Bangladesh will no longer be allowed to use Indian land, air, or sea routes for importing goods from third countries or exporting goods to them.
Immediate Impact on Bangladesh’s International Trade
The cancellation of the transshipment facility is expected to deliver a significant blow to Bangladesh’s international trade. Until now, Bangladesh had leveraged Indian infrastructure—such as land customs stations (LCS), airports, and seaports—for trading with landlocked countries like Nepal, Bhutan, and Myanmar. This facility enabled faster, cost-effective logistics for exporters and importers. With this advantage now withdrawn, trade will face increased costs, delays, and operational uncertainty.
According to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), this decision will disrupt Bangladesh’s logistics chain, potentially prompting concern from neighboring countries like Nepal and Bhutan.
Political Context Behind the Decision
Experts believe this move is a response to recent political comments made by Muhammad Yunus, chief advisor to Bangladesh’s interim government. During a visit to China in late March, Yunus stated, “India’s northeast is landlocked, and Bangladesh is its only gateway to the sea.” His remarks, hinting at strategic alternatives for China in the region, were seen as a veiled challenge to India’s territorial sovereignty—especially concerning the strategically vital Siliguri Corridor, also known as the “Chicken’s Neck.”
In reaction, the Indian government, under Prime Minister Narendra Modi, has taken a strong stance, emphasizing that any interference in India’s territorial integrity will not be tolerated.
Bangladesh’s Garment Industry Likely to Suffer
One of the most affected sectors will be Bangladesh’s ready-made garments (RMG) industry, which forms a substantial part of the country’s export economy. These goods were often shipped via Indian gateways like Indira Gandhi International Airport in Delhi to third countries. With this route now inaccessible, exporters will face increased freight charges and longer shipping times, weakening Bangladesh’s competitiveness in global markets.
Strategic Importance of Siliguri and the Chicken’s Neck
The Siliguri Corridor in West Bengal, commonly referred to as India’s “Chicken’s Neck,” is a narrow stretch of land that connects mainland India to its northeastern states—collectively known as the “Seven Sisters.” This area holds immense strategic value, as it lies close to Nepal, Bhutan, and Bangladesh. There are growing concerns in India that Bangladesh harbors ambitions to influence the region and exploit its geographic leverage.
By revoking the transshipment agreement, India has effectively disrupted any such strategic aspirations and reaffirmed control over this critical region.
Global Reactions and Diplomatic Ripples
The abrupt cancellation of the transshipment privileges has stirred diplomatic conversations in South Asia. Neighboring countries dependent on transit through India and Bangladesh may raise concerns over the rising logistical challenges. This decision could also influence future trade negotiations and bilateral relations in the region.
Conclusion: India Sends a Clear Message
India’s decision to withdraw transshipment facilities from Bangladesh is not just an economic move—it’s a calculated geopolitical statement. By taking this step, India has demonstrated that its national integrity and strategic interests are non-negotiable. While Bangladesh scrambles to find alternative trade routes, the regional power dynamics in South Asia may be heading toward a significant realignment.